S. African consumer confidence index up to -5 in Q3

South Africa’s consumer confidence index (CCI), sponsored by First National Bank (FNB) and compiled by the Bureau for Economic Research (BER), rose to -5 points in the third quarter from -10 points in the previous quarter.

Mamello Matikinca-Ngwenya, FNB’s Chief Economist, attributed the increase in confidence to a combination of positive factors. These include the formation of the government of national unity, the absence of load-shedding (power outages), a stronger rand exchange rate, and significant declines in fuel prices.

Additionally, the recent implementation of the two-pot retirement system allows consumers to access a portion of their retirement savings, providing a much-needed financial boost for households facing financial difficulties.

While confidence among high-income and middle-income households has improved, low-income households continue to struggle. The lack of pension funds and debt tied to the prime interest rate limits the positive impact of the two-pot policy and potential interest rate cuts on this segment of the population.

As the central bank is set to announce its interest rate decision on Thursday, economists are anticipating a 25-basis-point cut due to the slowing inflation rate.

Attribution: Reuters

Subediting: M. S. Salama